Standard Chartered has upgraded its income and return outlook after reporting a third-quarter profit that exceeded analyst expectations, driven by a record performance in its wealth solutions division.
Adjusted pre-tax profit climbed to US$1.99 billion, outperforming the consensus forecast of US$1.79 billion compiled by Bloomberg. The strong results were largely attributed to the bank’s wealth management and global banking units.
“We now expect to deliver an underlying return on tangible equity of around 13 per cent in 2025 — achieving our target a year earlier than planned,” said Bill Winters, Chief Executive Officer, in a statement on Thursday.
Like its larger competitor HSBC Holdings Plc, Standard Chartered is currently implementing a major restructuring initiative, dubbed ‘Fit for Growth’. This transformation programme encompasses several hundred projects across the organisation, designed to deliver savings ranging from a few hundred thousand to tens of millions of dollars.
The initiative is now in its second year of a three-year rollout, with the majority of the expected savings anticipated in 2025 and 2026. During the third quarter, the bank recorded a US$138 million charge related to the programme.
Following the announcement, Standard Chartered’s shares continued to climb, rising as much as 4.25 per cent to HK$159.50, marking their highest level in more than a decade.
The lender also revised its 2025 income growth forecast, now projecting figures at the upper end of the 5–7 per cent range, compared to earlier guidance at the lower end. Additionally, it raised its return on tangible equity (ROTE) target to “around 13 per cent” in 2025, from the previous estimate of “approaching 13 per cent” in 2026.
Income from global banking, encompassing lending and capital markets, rose 24 per cent to US$588 million, while wealth solutions achieved a record quarter with a 28 per cent jump in income.
Like several major lenders in Hong Kong, Standard Chartered is benefiting from a surge in wealth management activities as it continues to expand its private banking capabilities. Last year, the bank announced plans to double its investment in serving affluent clients to US$1.5 billion over five years. The objective is to attract US$200 billion in net new money between 2025 and 2029, and to grow the wealth and retail banking division’s contribution to approximately three-quarters of total income.
During the third quarter alone, the bank recorded net inflows of US$13 billion and welcomed 67,000 new affluent clients.
Amid increased scrutiny surrounding private credit — following the failures of subprime auto lender Tricolor and auto parts supplier First Brands — Standard Chartered reported that its private credit exposure remains below US$3 billion, representing less than 0.5 per cent of total group assets. The bank clarified that these exposures relate to non-bank corporate lenders and that regular portfolio reviews have revealed no material concerns.
However, credit impairments edged higher to US$195 million in the third quarter, compared with US$178 million in the same period last year.